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Chile's insurance sector is considered mature in a regional context, and is known for its solvency and innovation.
Penetration is high. On average, each Chilean has three policies, while each family holds 15.
Almost 70 companies, both local and foreign, operate in the country. None has a market share greater than 10%.
In the first quarter, Chilean insurers posted earnings of US$311mn, up 59.9% year-on-year.
Chilean insurers are represented by the Chilean association of insurers (AACh). Founded in 1899, AACh is based in capital Santiago and its members account for 99% of premiums in the country.
AACh has more than 20 committees, formed by representatives of member insurers. AACh's current president is José Manuel Camposano (pictured), who also wears the hat of president of Chilena Consolidada (Zurich Chile).
The sector watchdog is the SVS.
CHILE'S P&C INSURERS AND KEY METRICS - Q1
CHILE'S LIFE INSURERS AND KEY METRICS - Q1
The life segment generated earnings of US$297mn, up 64.2% year-on-year, mainly because of the strong performance of insurers' investments.
Meanwhile the P&C segment posted earnings of US$14.7mn, up 4.7%. Insurers cited higher retention of premiums which was partially offset by the performance of investments and a hike in claims and intermediation costs.
SECTOR-RELATED BILLS IN CONGRESS
- Data protection
The bill establishes regulations governing the handling and protection of personal data and creates a data protection agency. It was submitted to congress for debate in March 2017 and is currently in the lower house.
- Consumer rights protection
The bill modernizes the country's consumer rights protection framework. The sponsors of the bill hope to achieve this through measures such as strengthening consumer protection agency Sernac, strengthening consumer associations, and including compensation for non-material losses in class action lawsuits. Fines and penalties are also being reviewed. It was submitted to congress for debate in March 2014 and is in the senate.
- Infrastructure fund
The bill creates an infrastructure fund designed to spur public works investment. The treasury would have a 99% stake and state development agency Corfo the balance. It was submitted to congress for debate in May 2016 and is in the senate.
- Transparency and responsibilities of market agents
The bill seeks to increase trust in the markets and create a system that operates smoothly within a framework of fair and ethical competition and that is free of abusive trading practices. The bill was submitted in July 2015 and is in the senate.
- Modernizing the general banking law
The bill seeks to boost the resilience of the country's banking system by bringing associated rules and regulations in line with Basel III. It also gives regulatory authorities more tools and creates a new sector watchdog, the CMF. The bill was submitted in June 2017 and is in the lower house.
- Risk-based supervision system for insurers
The bill establishes a risk-based supervision model for insurers which would replace the country's capital-based approach. The new model would apply to both investments and insurance obligations. The bill was submitted in June 2017 and is in the lower house.
- Pension reform bill
A much-anticipated pension reform bill is due to be submitted to congress in August 2017.
Chile's insurance sector appears robust and resilient. The economy is not firing on all cylinders and that is reflected in the sales figures. Although sales dipped 1% in the first quarter, bottom lines are healthy and sector association AACh expects revenue for full-year 2017 to grow 1%. AACh has called on the government to adopt pro-growth measures.
The industry is aware of the need to embrace technology, and also closely monitor how it evolves and impacts their business.
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